Business

Smyth on the economy

The latest State of the States report released today by CommSec has highlighted the slipping state of the ACT economy and demonstrates ACT Labor’s irresponsible economic management over the past 11 years, Shadow Treasurer Brendan Smyth said today.

“Today’s report shows the ACT is missing out on essential business investment while the ‘eyes of the economy’, the retail sector is also getting weaker. Construction work in the ACT is more than 16 percent below the decade average and only Tasmania is faring worse in the annual economic growth stakes,” Mr Smyth said.

“When the Canberra Liberals left office, private sector employment was around 60 percent, while under ACT Labor it’s shrunk to around 49 percent. This means the Canberra economy’s ability to weather changes in public sector employment is diminished.

“The ACT government has to be held accountable for the deterioration in business investment because ACT Labor has taken no steps to diversify the Territory economy.

“Andrew Barr can’t blame the federal government for worsening business investment and a sluggish retail trade when ACT Labor has underspent on necessary infrastructure and has failed to take any effective steps to encourage diversification in the ACT economy.

“The ACT is missing out on near record equipment investment. While Queensland and Western Australia are 27 and 24.6 percent above decade average levels in the September quarter respectively, the ACT is only up 1 percent.

Without wanting to do Andrew Barr’s work for him there are a few problems here.

Over the last 11 years Canberra’s had a boom in public sector employment. While not good for the city’s general economy it’s not something we had much say in.

When the real estate market is running white hot and people unable to file alphabetically can get cushy jobs in the public service what sort of business would choose to open up in Canberra? (Aside from those seeking to take advantage of lax regulation which is sub-optimal)

Does Brendan propose we start a major mining industry in the ACT to get our equipment investment levels up to Queensland and WA levels?

Frankly I worry Andrew Barr is spending too much money on counter-cyclical development spending (from a City Government no less).

Perhaps some well informed Rioter(s) could comment on Brendan’s statement that “When the Canberra Liberals left office, private sector employment was around 60 percent, while under ACT Labor it’s shrunk to around 49 percent” and whether that change has been completely due to the growth in the federal public sector.

If we look at the end of 2001 vs June 2013 the numbers are:

Commonwealth from 53,300 to 82,700 up 29,400
ACT PS from 17,900 to 25,500 up 7600
Private sector 99,000 to 103,300 up 4300.

So the ratios are 71%:18%:10%

Thanks, Davo.

Another interesting way to look at those numbers is to note that the Commonwealth grew by 55.1%, the ACT PS by 42.4% and the private sector by 4.3% – quite stark, really.

Canberra should aim to be the Silicon Valley of Australia. We have a highly educated work force with two universities both offering technology degrees and some of the biggest technology companies/outsourcers/government agencies in town. We also have a good number of data centre operators with Tier 3 data centres located all over Canberra.

Imagine drawing away some of the security brains working at DSD, IBM, Verizon, Telstra and any number of other Internet Security and consultancy firms to work at the equivalent of a Google or some other fancy start-up. Name any department in Canberra and I bet they have a bunch of highly competent IT people from Sys admins all the way through to web developers.

The ACT government needs to stop propping up the retail/building sector and start attracting big, medium small, start-up tech firms to Canberra. Start lobbying the Federal Government to review and change the laws around share ownership in start-up and in no time at all you’d see a difference.

Our reliance on the APS is pathetic, when we have the abundant talent pool of techies ready and ripe for the picking to create our very own Silicon Valley.

ACT Governments of both persuasions have been reticent to entertain any business interest – Australian or otherwise with the foresight to develop the Territory into anything that does not rely on the Public Service to sustain.

In 2003, it was the Federal Government sold the Canberra Airport to Canberra businessman Terry Snow and his family when the airport was declining and aviation infrastructure were ageing and beginning to become obsolete. Despite detractors, the venture still operates and is expanding. Unfortunately, General Aviation and the private pilot has suffered; but they could not be continued to be subsidised from the Commonwealth purse either.

In the 90’s, the Libs knocked back Dick Smith’s offer to donate a Sikorsky F76A twin-engine helicopter to Canberra for use as a rescue aircraft. Yes, Dick Smith wanted something in return from the ACT Government in the way of reduced red tape (not exemptions). Again, foolish Dick (not once bitten, twice shy) around 2002 – 2003, due to more red tape under Labor, Dick Smith abandoned plans to build a boutique hotel at Manuka. From what I have read, Dick Smith has given away more than he has ever asked for in return.

In my view, there are parallels between the all ACT Governments and Australian based multi-national Westfield – they do not want to do business with anyone who is equal to or stronger than they are. No matter how honourable their intentions.

By the way, the Hawke Government sold Belconnen Mall to Westfield. I believe Ros Kelly was Member for Canberra at that time (of sports-rort and whiteboard fame).

Following self-government, no ACT Government has had a personality with the expertise or foresight to lead the ACT into a 21st century, self sustaining jurisdiction away from the teat of the public sector and the government purse. Hence, we have RIOTACT.

Perhaps some well informed Rioter(s) could comment on Brendan’s statement that “When the Canberra Liberals left office, private sector employment was around 60 percent, while under ACT Labor it’s shrunk to around 49 percent” and whether that change has been completely due to the growth in the federal public sector.

If we look at the end of 2001 vs June 2013 the numbers are:

Commonwealth from 53,300 to 82,700 up 29,400
ACT PS from 17,900 to 25,500 up 7600
Private sector 99,000 to 103,300 up 4300.

“Frankly I worry Andrew Barr is spending too much money on counter-cyclical development spending (from a City Government no less).”

+1 – I think the ACT Government’s intentions in this regard are essentially well-meaning, and consistent with their stated values, but I do, at times, think of the story of Canute trying to hold back the waves, and also worry about the longer term costs of counter-cyclical policies and who will eventually pay for them.

Perhaps some well informed Rioter(s) could comment on Brendan’s statement that “When the Canberra Liberals left office, private sector employment was around 60 percent, while under ACT Labor it’s shrunk to around 49 percent” and whether that change has been completely due to the growth in the federal public sector.